Dear Members,
The Board of Directors (Board) presents the annual report of Atul Ltd
together with the audited Financial Statements for the year ended on March 31, 2025.
01. Financial results
|
Standalone |
Consolidated |
|
2024-25 |
2023-24 |
2024-25 |
2023-24 |
| Revenue from operations |
5,075 |
4,358 |
5,583 |
4,726 |
| Other income |
133 |
134 |
109 |
58 |
| Total income |
5,208 |
4,492 |
5,692 |
4,784 |
| Profit before tax |
623 |
510 |
692 |
451 |
| Tax expenses |
(167) |
(125) |
(193) |
(127) |
| Profit for the year |
456 |
385 |
499 |
324 |
| Profit is attributable to: |
|
|
|
|
| Owners of the Company |
456 |
385 |
484 |
323 |
| Non-controlling interests |
- |
- |
15 |
1 |
| Balance in retained earnings at the beginning
of the year |
4,356 |
4,107 |
4,340 |
4,153 |
| Profit attributable to owners of the Company |
456 |
385 |
484 |
323 |
| Transfer from comprehensive income |
- |
- |
- |
- |
| Buy-back of equity shares |
|
|
|
|
| (net of amount adjusted from general reserve) |
- |
(62) |
- |
(62) |
| Dividend |
(59) |
(74) |
(59) |
(74) |
| Balance in retained earnings at the end of
the year |
4,753 |
4,356 |
4,765 |
4,340 |
02. Performance
Standalone revenue for the year at 5,075 cr increased by 16% compared
to that of last year; the increase was mainly because of increase in volume. Sales
increased by 16% in India and 17% outside India while sales volume increased by 15% and
17% respectively. Details about the two segments are given in Management Discussion and
Analysis.
Profit before tax (PBT) at 623 cr increased by 22% compared to that
of last year mainly because of increase in sales volume and improved margins.
Consolidated revenue for the year at 5,583 cr increased by 18%
compared to that of last year. Sales of Life Science Chemicals (LSC) segment increased by
19% whereas those of Performance and Other Chemicals (POC) segment increased by 18%. PBT
at 692 cr increased by 53% mainly because of increase in sales and better performance of
the Group entities, like Amal Ltd (Amal), Atul Products Ltd (APL) and Rudolf Atul
Chemicals Ltd (RACL). Amal (along with its 100% subsidiary company, Amal Speciality
Chemicals Ltd) and RACL recorded their highest sales and PBT so far. APL, which had
commissioned a new 300 TPD caustic soda manufacturing plant last year, further streamlined
its operations — increased sales (from 65 cr) to 353 cr and increased EBITDA from
10 cr to 97 cr. Anaven LLP (Anaven), which operates one of
the most modern Monochloroacetic acid manufacturing plants in the world, and the biggest
in India — became EBITDA positive. However, it did not operate at optimum capacity
due to lower product offtake.
03. Dividend
The Board recommended dividend of 25 against last year 20 per
equity share of 10 each fully paid-up for the year ended on March 31, 2025. The dividend
will entail an outflow of 73.60 cr on the paid-up equity share capital of 29.44 cr.
The payout was 16% against 15% last year.
04. Energy conservation, technology absorption, foreign exchange
earnings and outgo
Information required under Section 134 (3)(m) of the Companies Act,
2013 (the Act), read with Rule 8(3) of the Companies (Accounts) Rules, 2014, as amended
from time to time, forms a part of this report, which is given on page number 54.
05. Insurance
The Company has taken adequate insurance for its ed assets, employees
and products fix currentand against various relevant risks.
06. Risk management
Risk management is an integral part of the business practice of the
Company. The framework of risk management concentrates on formalising a system to deal
with the most relevant risks, building on existing management practices, knowledge and
structures. With the help of a reputed international consultancy firm, the Company
developed and implemented a comprehensive risk management system to ensure that risks to
its continued existence as a going concern and to its growth are identified and remedied
on a timely basis. The Company considered leading standards and practices while defining
and developing the formal risk management system, leading standards and practices were
considered. The risk management system is relevant to the business reality, is pragmatic,
simple and involves the following: a) Risk identification and definition Focuses on
identifying relevant risks, creating updating clear definitions understanding along with
details of the underlying root causes contributing factors. b) Risk classification Focuses
on understanding the various impacts of risks and the level of influence on their root
causes. This involves identifying various processes, generating the root causes and a
clear understanding of risk inter-relationships. c) Risk assessment and prioritisation
Focuses on determining risk priority and risk ownership for critical risks. This involves
the assessment of the various impacts taking into consideration risk appetite and the
existing mitigation controls. d) Risk mitigation Focuses on addressing critical risks to
restrict their impact(s) to an acceptable level (within the defined risk appetite). This
involves a clear definition of actions, responsibilities and milestones. e) Risk reporting
and monitoring Focuses on providing to the Audit Committee and Board periodic information
on risk profile evolution and mitigation plans.
Roles and responsibilities
Governance
The Board approved the Risk Management Policy of the Company. The
Company laid down procedures to inform the Board on a) to d) listed above. The Audit
Committee the Risk Management Committee periodically reviews the risk management system
and gives its recommendations, if any, to the Board. The Board reviews and guides the Risk
Management Policy.
Implementation
Implementation of the Risk Management Policy is the responsibility of
the Management. It ensures the functioning of the risk management system as per the
guidance of the Audit Committee the Risk Management Committee. The Company has a risk
management oversight structure in which each sub-segment has a Chief Risk and
Compliance
The Management at various levels takes accountability for risk
identification, appropriateness of risk analysis and timeliness, as well as the adequacy
of risk mitigation decisions at both individual and aggregate levels. It is also
responsible for the implementation, tracking and reporting of defined mitigation plans,
including periodic reporting to the Audit Committee and Board.
. Internal financial controls
The internal financial controls over financial reporting are designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of the Financial Statements. These include policies and procedures that: a)
pertain to the maintenance of records, which in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the Company, b) provide
reasonable assurance that transactions are recorded as necessary to permit the preparation
of the Financial Statements in accordance with Generally Accepted Accounting Principles
and that receipts and expenditures are being made only in accordance with the
authorisations of the Management and Directors of the Company, c) provide reasonable
assurance regarding the prevention or timely detection of unauthorised acquisition, use or
disposition of the assets that can have a material effect on the Financial Statements. A
reputed international consultancy firm has reviewed the adequacy of the internal financial
controls concerning the
Financial Statements.
The Management assessed the effectiveness of the internal financial
controls over financial reporting as at March 31, 2025 and the Board believes that the
controls are adequate.
08. Fixed deposits
The Company did not accept any deposits from public and as such no
amount on account of principal or interest on deposits from public was outstanding as at
March 31, 2025.
09. Loans, guarantees, investments and security
Particulars of loans, guarantees, investments and security provided are
given on page numbers 179 and 181. During 2024-25, the Company has received all
stipulated amounts of principal and interest as per schedule in respect of loans granted,
except that, in respect of the secured loan given to Anaven LLP, the amount of
9.15 cr (aggregate of 13.73 cr) as principal and an amount of
3.06 cr (aggregate of
4.24 cr) as interest are overdue as at March 31, 2025. The principal
amount is secured, and hence the Company has not made any provision. As a matter of
abundant precaution, the Company has made provision for the interest of
2.80 cr (aggregate of 4.24 cr) in the books as at March 31,
2025, though the Company is expecting to recover the same.
During 2024-25, the Company has extended repayment period by 12 months
of unsecured loan of
1.74 cr given to Anaven LLP.
The Company is evaluating various options to mitigate the unprecedented
adverse business conditions which Anaven LLP is facing.
10. Subsidiary, joint venture and associate companies entities and
joint operation
During 2024-25, there were no changes in the number of subsidiary,
joint venture and associate companies entities and joint operation. Details of subsidiary,
joint venture and associate companies entities and joint operation are given on page number
56.
11. Related party transactions
All the transactions entered into with the related parties were in the
ordinary course of business and on an arm's length basis. Details of such
transactions are given on page number 193. No transactions were entered into by the
Company that required disclosure in Form AOC-2.
12. Corporate social responsibility
The Corporate Social Responsibility (CSR) Policy, the CSR report and
the composition of the CSR Committee are given on page number 58.
13. Annual return
Annual return is available on the website of the
Company at: www.atul.co.in/investors/annual-general-meetings/
14. Auditors
Statutory Auditors
Deloitte Haskins & Sells LLP, Chartered Accountants were
reappointed as the Statutory Auditors of the Company at the 45th Annual General
Meeting (AGM) held on July 29, 2022, until the conclusion of the 50th AGM.
The Auditor's Report for the financial year ended on March 31,
2025, does not contain any qualification, reservation or adverse remark. The report is
enclosed with the Financial Statements in this annual report.
Cost Auditors
The Company has maintained cost records as required under the Act and
the Companies (Cost Records and Audit) Rules, 2014. The members ratified the appointment
of R Nanabhoy & Co as the
Cost Auditors for 2024-25, on July 26, 2024.
Secretarial Auditors
SPANJ & Associates, Company Secretaries, continue to be the
Secretarial Auditors for 2024-25 and their report is given on page number 61.
As per Regulation 24A of the Securities and Exchange
Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (the Regulations), Secretarial Auditors can be appointed for a term of
five consecutive years with the approval of the members. Accordingly, based on the
recommendation of the Audit Committee, the Board at its meeting held on April 25, 2025,
recommended the appointment of SPANJ & Associates, Company Secretaries as the
Secretarial Auditors of the Company for a term of five consecutive financial years from
2025-26 to 2029-30 for the approval of the members at the ensuing AGM. SPANJ &
Associates have given their consent to act as the Secretarial Auditors and confirmed their
eligibility for appointment.
15. Directors' responsibility statement a) In preparation of
the annual accounts for the financial year that ended on March 31, 2025, the applicable
accounting standards have been followed and there are no material departures. b) The
accounting policies were selected and applied consistently and judgements and estimates
thus made were reasonable and prudent to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit and loss of the
Company for that period.
c) Proper and sufficient care was taken for maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities. d)
The attached annual accounts for the year ended on March 31, 2025, were prepared on a
going concern basis. e) Adequate internal financial controls to be followed by the Company
were laid down, and they were adequate and operating effectively. f) Proper systems were
devised to ensure compliance with the provisions of all applicable laws and the same were
adequate and operating effectively.
16. Directors
16.1 Retirement Reappointment Appointment a) Retirement
Mr Mukund Chitale, Ms Shubhalakshmi Panse and Mr Baldev Arora,
Independent Directors completed their respective second terms as Independent Directors and
accordingly, ceased to be Directors during the year.
The Board places on record its deep appreciation for their valuable
contribution through sustained involvement, critical analysis and insightful guidance. b)
Reappointment According to Article 86 of the Articles of Association of the Company, Mr
Gopi Kannan Thirukonda retires by rotation and being eligible, offers himself for
reappointment at the ensuing AGM. c) Appointment Ms Padmaja Chunduru was appointed as an
Independent Director for a period of five years and Mr Vivek Gadre was appointed as a
Whole-time Director for a period of three years, effective January 24, 2025.
In the opinion of the Board, Ms Padmaja
Chunduru, Independent Director, fulfils requisite conditions as per
applicable laws and is independent of the management of the Company.
16.2 Policy on appointment and remuneration
The policy is displayed on the website of the Company at
www.atul.co.in/investors/policies
The salient features of the Policy are as under:
16.2.1 Appointment
While recommending the appointment of Directors, the the Nomination and
Remuneration Committee considers the following factors: a) Qualification: well-educated
and experienced in senior leadership positions within the industry b) Trait: positive
attributes and qualities c) Independence: criteria prescribed in the Act and the
Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations,
2015 (the Regulations), for the Independent Directors, including no pecuniary interest and
conflict of interest
16.2.2 Remuneration of the Non-executive Directors a) Sitting fees: up
to 50,000 for attending a Board, Committee and any other meeting b) Commission: up to 1%
of net profit as may be decided by the Board based on i) Membership of committee(s) ii)
Profit iii) Attendance iv) Category (Independent or Non-executive) 16.2.3 Remuneration of
the Executive Directors
This is given under paragraph number 17.2.
16.3 Criteria and method of the annual evaluation
16.3.1 The criteria for evaluation of the performance of a) the
Executive Directors, b) the Non-executive
Directors (other than Independent Directors), c) the Independent
Directors, d) the Chairman, e) the Committees of the Board and f) the Board as a whole are
summarised in the table at the end of the Directors' Report on page number 53.
16.3.2 The Independent Directors have carried out annual: a) review of
the performance of the Executive
Directors b) review of the performance of the Chairman and assessment
of quality, quantity and timelines of the flow of information to the Board c) review of
the performance of the Board as a whole 16.3.3 The Board has carried out an annual
evaluation of the performance of: a) its committees, namely, Audit, Corporate Social
Responsibility, Investment, Nomination and Remuneration, Risk Management and Stakeholders
Relationship b) the Independent Directors The templates for the above purpose were
circulated in advance for feedback from the Directors.
16.4 F amiliarisation programs for the Independent
The Company has familiarisation programs for its Independent Directors.
It comprises, amongst others, presentations by and discussions with the Senior Management
on the nature of the industries in which it operates, its vision and strategy, its
organisation structure, and relevant regulatory changes. A visit is organised to one or
more of its manufacturing sites. Details of the familiarisation programmes are also
available at www.atul.co.in/about/directors/
17. K ey Managerial Personnel and employees
17.1 Appointments and cessations of the Key Managerial Personnel
Mr Vivek Gadre was appointed as a Whole-time Director for a period of
three years effective January 24, 2025. There were no other changes in the Key Managerial
Personnel during 2024-25.
17.2 Remuneration
The Remuneration Policy related to the Key Managerial Personnel and
other employees consists of the following: 17.2.1 C omponents:
a) Fixed pay
i) Basic salary
ii) Allowances
iii) Perquisites
iv) Retirals
b Variable pay )
17.2.2 Factors for determining and changing fixed pay:
a) Existing compensation
b Education )
c Experience )
d) Salary bands
e Performance )
f Market benchmark )
17.2.3 Factors for determining and changing variable pay:
a) Company performance
b Business performance )
c Individual performance )
d) Work level
18. Analysis of remuneration
The information required pursuant to Sections 134 (3)(q) and 197(12) of
the Act, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, in respect of employees of the Company, forms a part of this
Report. However, as per the provisions of Sections
Directors 134 and 136 of the Act, the Report and the Accounts are being
sent to the members and others entitled thereto, excluding the information on particulars
of employees, which are available for inspection by the members.
Any member interested in obtaining a copy of such statement may write
to the Company Secretary at the registered office of the Company.
19. Management Discussion and Analysis
The Management Discussion and Analysis covering other the
performance of the two reporting segments, namely, LSC and POC, is given on page number
66.
20. C orporate Governance Report
20.1 Declaration by the Independent Directors
The Independent Directors have given declarations under Section 149(6)
of the Act.
20.2 Report
The Corporate Governance Report, along with the certificate from the
Practicing Company Secretary regarding the compliance of the conditions of corporate
governance pursuant to Regulation 34(3), read with Schedule V of the Regulations, is given
on page number 73. Details about the number of meetings of the Board held during 2024-25,
are given on page number 78. The composition of the Audit Committee is given on page
number 81.
All the recommendations given by the Audit Committee were accepted by
the Board.
20.3 Whistleblower Policy
The Board, on the recommendation of the Audit Committee, had approved a
vigil mechanism (Whistleblower Policy). The Policy provides an independent mechanism for
reporting and resolving complaints about unethical behaviour, actual or suspected fraud
and violation of the Code of Conduct of the Company and is displayed on the website of the
Company at www.atul.co.in/investors/policies
No person has been denied access to the Audit Committee.
20.4 Secretarial standards
Secretarial standards as applicable to the Company were followed and
complied with during 2024-25.
20.5 P revention, prohibition and redressal of sexual harassment
Details required under the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
and rules thereunder are given on page number 86.
21. Business Responsibility and Sustainability Report
As per Regulation 34 of the Securities and Exchange
Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Business Responsibility and Sustainability Report is given on page
number 94.
22. Dividend Distribution Policy
As per Regulation 43A of the Securities and Exchange
Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Dividend Distribution Policy is displayed on the website of the
Company at www.atul.co.in/investors/policies
23. Acknowledgements
The Board expresses its sincere thanks to all the employees, customers,
suppliers, lenders, regulatory and government authorities, stock exchanges and investors
for their support.
For and on behalf of the Board of Directors
|
(Sunil Lalbhai) |
| Mumbai |
Chairman and Managing Director |
| April 25, 2025 |
DIN: 00045590 |